OPM chooses Workday for no-bid contract to overhaul HR system
Gettyimages.com/ phattharachai Rattanachaiwong
By
Nick Wakeman
With White House deadlines and directives looming, the Office of Personnel Management goes with Workday to quickly implement a human capital platform with the intent to be a model for other agencies.
The Office of Personnel Management is moving forward with a sole-source contract to Workday to build an integrated human capital management solution.
A May 2 memo on the contract cites OPM’s currently fragmented HR systems and tight deadlines to comply with President Trump’s executive orders mandating workforce restructuring and merit-based hiring reforms.
OPM needs real-time workforce data and integrated HR capabilities that are not possible with its current systems, states the memo signed by OPM’s chief strategy and innovation officer Dennis Johnson.
The agency faces several issues with its current HR systems that make it a challenge to meet the White House mandates. The memo specifically mentions payroll errors, benefits disruptions and too large of a manual workload.
Workday faces a tight deadline to address these issues and needs to field a cloud-based HR system by July 15, which is when the current federal hiring freeze ends.
The company is tasked with implementing functions such as core HR and personnel action processing, payroll and benefits integration, and audit ready reporting. Other requirements include time and attendance tracking, talent acquisition and performance management, and compliance with federal-specific requirements.
The memo says Workday's system will need to comply with federal security standards set out by the Federal Information Security Modernization Act and be FedRAMP-certified.
In conjunction with the hiring freeze, new requirements also begin on July 15 that tie new hires to attrition at a 4-to-1 ratio.
“Compliance with these mandates requires real-time visibility into workforce attrition, authorizations, vacancies, and onboarding — all of which are impossible to achieve with the agency’s current fragmented systems,” the memo states.
OPM said Workday is the only provider platform that could meet its needs. Dayforce was the second company that expressed interest, but the agency says Workday offered several features that Dayforce did not.
The memo doesn’t state the value of the project for Workday, but OPM claims it is a 70% decrease compared to current costs. OPM also its touting savings of $600,000 it would generate, versus manual processes the agency would need to implement requirements from the executive orders and presidential directives.
Some other reasons OPM chose Workday include the company's experience in deploying a human capital system for Walmart and at least 60% of Fortune 500 companies. Workday also involved in similar HR overhaul efforts at the Energy Department and Defense Intelligence Agency.
In setting up the Workday contract, OPM consulted with other agencies that have implemented cloud-based human capital platforms.
The company began to prioritize the federal market after its solutions were FedRAMP-certified in 2021.
OPM said it went with the no-compete route because a traditional procurement would have taken between six and nine months, meaning it would have failed to meet the White House deadlines.
“No other vendor currently offers the combination of immediate deployability, federal compliance, and total HCM integration necessary to meet OPM’s urgent operational and regulatory needs,” the agency wrote in the memo.
The sole-source contract has a one-year term. OPM said it will run a full-and-open competition at that time “if no justifiable sole-source condition exists.”
OPM's contract with Workday also has implications across the government because of how it sets standards and policy for all agencies, a source told Washington Technology.
“OPM is just the tip of the spear,” the source said.
Other federal agencies will likely follow OPM’s lead of using a commercially-available and cloud-based product. Workday is just the first to get out of the gate.
The company is already working with several federal systems integrators including Accenture Federal Services, Groundswell, Guidehouse and KPMG.
In a statement, a company spokesman said: “Workday is honored to partner with OPM in modernizing their HR systems to enhance operational efficiency and elevate the experience for federal employees.”